Purchases for Resale

Contrary to what some people believe, a sales and use tax license is not a "tax number" that exempts you from paying sales and use tax. You may make tax-exempt purchases that you intend to resell or property that you will incorporate into something you manufacture to sell. To receive this exemption, you must give the vendor a resale certificate.

Resale Certificate

A resale certificate is a written statement that you provide stating that the merchandise or taxable service you buy will be resold in a taxable sale or that it will be incorporated into tangible personal property or used in a service that will be taxed when it is sold. Although there is no specific form for a resale certificate, it must include:

• a signed statement that the purchase is intended for resale,
• the purchaser's name and address, and
• the purchaser's Maryland sales and use tax registration number.

Vendors should keep resale certificates on file as part of your business records. You must be able to match your sales records with the appropriate resale certificates for audit purposes. You can be held liable for uncollected taxes if you accept resale certificates for sales that you know or should know are not for resale.

Resale certificates may not be used to make tax-free purchases for resale if the purchase is less than $200 and payment is by cash, check or credit card unless the seller delivers the goods directly to the buyer's retail place of business.